Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82725
Authors: 
Eklöf, Matias
Hallberg, Daniel
Year of Publication: 
2006
Series/Report no.: 
Working Paper, Department of Economics, Uppsala University 2006:13
Abstract: 
We model retirement behavior in Sweden during the 1990ies with focus on voluntary early retirement where there is an option for “buy-outs”. An employer can offer the employees generous pension programs if the employee agrees on early retirement. Earlier studies have neglected such offers, but in doing so, estimates of the individuals’ responses to financial incentives in a retirement decision are likely to be biased upward. We propose an estimation strategy where the retirement decision and the accesses to early retirement pension offers are estimated in a simultaneous equation system, yielding unbiased estimates of the model parameters. We apply the model using detailed Swedish register data. Our results indicate that the marginal effects in retirement probability w.r.t. a change in financial incentives is less pronounced if early retirement pensions are accounted for. Further, we illustrate that the early retirement probabilities would decrease by 10-30 percent if early retirement pension offers were absent.
Subjects: 
Retirement
early retirement pension
golden handshakes
occupational pension
demand for old workers
JEL: 
J14
J21
Document Type: 
Working Paper

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